Inter na ti onal

monetar y fund
(IMF)

Uni. Ref Book –Page nos –

123/136(M3)
 IMF
 International monetary institution
established by different countries after
World War II.
 WW – prices. Profits, share prices,
production, employment, income of
leading countries fell very low.
 affected the economies of the world.
 World wide depression
 Therefore, the monetary authorities of
the world felt the need for international
co-operation to establish international
monetary stability.
 IMF
 A conference of 44 major
countries was held at Bretton
Woods in July 1944 . The result
was the establishment of IMF and
International Bank for
Reconstruction and Development
(IBRD)
 These two institutions are called
“Bretton Woods Twins”
 IMF
 Came to existence in December 1945
and started functioning in March 1947.
 Autonomous institution affiliated to
UNO and functioning from Washington.
 Started with 30 countries and the
current strength is more than 150.
 The resources of the IMF are
subscribed by the members and
subscription quota of each member is
based on its national income
 OBJ ECTI VES
 To solve international monetary problems.
 Balanced growth of international trade
 Employment growth and income growth
 Development of productive resources odf all
member countries
 To promote exchange stability
 To give confidence to members that
resources are available to them
 Lesson the degree of disequilibrium in
International balance of payments.
 FUN CTI ON S
 It acts as a short term credit institution
 Orderly adjustments of exchange rate
 It is a reservoir of currencies of all
member nations, who can borrow the
currency of other nations
 It grants loans only for financing
current transactions and not capital
transactions
 Provides machinery for international
consultation
 Org aniza tio n of I MF
 Management of the fund is under
the control of two bodies.
(b) Board of Governors
(c) Board of Executive Directors
 Org aniza tio n of I MF
 The board of Governors has the responsibility
of formulating the general policies of the fund
 Consists of one Governor and an alternate
Governor from each member country.
 The board of executive directors controls the
day to day activities of the fund. It consists of
22 directors, 6 of these are appointed by the
members having the largest quotas, namely
US, UK, West Germany, France, Japan and
Saudi Arabia.
 Achievements
 Provision of credit – beneficial
for developing countries
 Exchange stability

 Expansion of world trade

 Machinery for consultation